Panic selling of shares as rupee depreciation takes its toll

By Hiran H.Senewiratne 

CSE activities were positive most of yesterday but began to decline during the latter part of the day due to panic selling by retail traders. The depreciation of the rupee against the dollar is worrying investors, stock market analysts said.   

 Trade Minister Bandula Gunewardene told parliament this week that the rupee exchange rate is controlled at 200 levels with great difficulty and if allowed to decline it could hit 300-350 levels, given past trends. However, he did not give a timeline for the Rs. 350 depreciation and other negative sentiments in the external environment combined with it to create some worries for CSE investors, analysts said. 

Some index heavy companies were the main negative contributors to the All Share Price Index.  Both indices moved downwards. The All Share Price Index moved down by 47.59 points and S and PSL20 went down by 25.78 points.

Turnover stood at Rs. 1.49 billion with one crossing. The crossing was reported in  HNB, which crossed 179200 shares to the tune of Rs. 23.3 million; its shares traded at Rs. 130. It is said  that share prices in 97 companies rose  and 105 recorded negative.  

LOLC shares went down by  3 percent or Rs. 9.50. Its  shares started trading at Rs. 302.50, at the end of the day they moved down to Rs. 293, contributing six negative points to the All Share Price Index. Expolanka  shares dropped by 5 percent or Rs. 2.30. Its shares started trading at Rs. 46 but at the end of the day they went down to Rs. 43.70, contributing 7.6 negative points to the All Share Price Index and Commercial Leasing, being an illiquid company in the CSE, contributed 7 negative points to the All Share Price Index yesterday. Its share price dropped by  7.8 percent or 50 cents. Its shares started trading at Rs. 6.40 at the beginning of the day and at the end of the day they moved down to Rs. 5.90.

Top five companies that mainly contributed to the turnover were, Browns Investments Rs. 478.4 million (86.5 million shares traded), Expolanka Rs. 131.8 million (94.7 million shares traded), Dipped Products Rs. 94.7 million (two million shares traded), JKH Rs. 73.8 million (494,000 shares traded) and LOLC Rs. 71.5 million (236,000 shares traded). During the day 114.2 million share volumes changed hands in 15700 transactions. 

 Sri Lanka’s rupee quoted steady at 199.00/200 to the one week US dollar on Thursday, while yields are flat in dull market, dealers said. The rupee last closed in the one-week forward market at 199.50/200.50 to the US dollar on Wednesday.